Amazon's self-driving subsidiary Zoox has received federal clearance from the National Highway Traffic Safety Administration (NHTSA) to begin charging passengers for rides in purpose-built robotaxis equipped with no steering wheel and no pedals — a first in U.S. regulatory history.

The approval, granted on Thursday, positions Jeff Bezos ahead of Elon Musk in the race to deploy fully autonomous vehicles on public roads. It marks the first time the U.S. government has authorized a vehicle designed entirely without manual controls for commercial passenger service. The milestone also represents a pivotal test case for how regulators will handle a coming wave of purpose-built autonomous vehicles seeking to move beyond testing programs into viable commercial businesses.

Regulatory First Despite Outdated Safety Framework

NHTSA cleared Zoox, a unit of Amazon (NASDAQ: AMZN), to operate commercially even though existing federal motor vehicle safety standards — originally written in the 1960s and 1970s under the assumption that a licensed driver sits behind a steering wheel — contain no provisions for vehicles lacking manual controls. The agency's administrator, Jonathan Morrison, stated that the vehicles meet safety standards set for conventional cars but noted that regulators will require ongoing proof that the autonomous driving system performs reliably over time.

The approval carries strict conditions. Zoox faces heightened oversight, including mandatory reporting of crashes and incidents where vehicles stop unexpectedly in inappropriate locations. The permit can be revoked if safety concerns emerge.

Launch Plans and Operational Scale

Zoox has already provided free rides to passengers in Las Vegas and San Francisco, with complimentary service also operating in Austin and Miami. Paid rides will begin in Las Vegas, with expansion to additional cities planned as the company clears state and local regulatory requirements. While NHTSA governs vehicle safety at the federal level, actual deployment of paid ride-hailing services still requires separate permits from state regulators and municipal authorities, meaning the federal approval is necessary but not sufficient for national rollout.

According to the company, more than half a million people have ridden in Zoox vehicles, accumulating over 3 million miles of travel prior to this commercial approval.

Under the current permit, Zoox may deploy up to 2,500 vehicles per year over the next two years — the maximum allowed under NHTSA's exemption process for vehicles that do not conform to existing safety standards. The company's longer-term strategy includes constructing a manufacturing facility near Silicon Valley with the capacity to produce as many as 10,000 robotaxis annually.

Zoox, which Amazon acquired for $1.2 billion, features a distinctive carriage-shaped design with face-to-face bench seating and a top speed of 75 miles per hour. The vehicle was engineered from the ground up exclusively for autonomous operation.

Safety Concerns and Recent Recall

The advocacy group Advocates for Highway and Auto Safety criticized the approval, stating that Zoox had not presented sufficient evidence demonstrating that a vehicle without standard manual controls is safe on public roads.

Earlier this month, Zoox recalled all 105 of its active robotaxis to address a software flaw that could cause the vehicles to fail to detect heavy smoke conditions.

Competitive Landscape: Tesla Lags Behind

Tesla (NASDAQ: TSLA) continues to develop its own steering-wheel-free "Cybercab" robotaxi, but the vehicle remains in the testing phase. Tesla currently operates paid rides only in conventional vehicles equipped with steering wheels and pedals.

The Bezos-Musk rivalry extends beyond autonomous vehicles. Their respective aerospace companies, Blue Origin and SpaceX, are both developing landers for NASA's Artemis program. Musk famously labeled Bezos a "copycat" in 2020 following Amazon's acquisition of Zoox.

Despite Zoox's regulatory milestone, both Amazon and Tesla continue to trail Alphabet's (NASDAQ: GOOGL) Waymo, the current market leader in autonomous ride-hailing. Waymo operates commercial services across more than 10 cities and logs approximately 500,000 paid rides per week. However, unlike Zoox's purpose-built robotaxis, Waymo's current fleet consists of conventional vehicles retrofitted with autonomous hardware and software — a distinction that makes Zoox's approval uniquely consequential for the next generation of vehicle design.

Reuters reported that this marks the first U.S. approval for a purpose-built robotaxi without human controls to charge for rides. Wired noted that the milestone places Zoox at the forefront of a rapidly intensifying autonomous mobility sector.